<PAGE>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

(Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

                For the quarterly period ended September 30, 2000

                                       OR

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number 0-22300

                        PW PREFERRED YIELD FUND II, L.P.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

                       DELAWARE                   84-1180783
                (State of organization)          (IRS Employer
                                              Identification No.)

                    88 BROAD STREET
                 BOSTON, MASSACHUSETTS               02110
                 (Address of principal            (Zip Code)
                  executive offices)





          Registrant's telephone number, including area code (617)854-5800

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .


<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.
                      QUARTERLY REPORT ON FORM 10-Q FOR THE
                        QUARTER ENDED SEPTEMBER 30, 2000
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                    PAGE

<S>                                                                                                                  <C>
PART I.           FINANCIAL INFORMATION

                  Item 1.           Financial Statements

                                    Balance Sheets - September 30, 2000 and December 31,
                                    1999 (unaudited)                                                                     3

                                    Statements of Income for the three months ended
                                    September 30, 2000 and 1999 (unaudited)                                              4

                                    Statements of Income for the nine months ended
                                    September 30, 2000 and 1999 (unaudited)                                              5

                                    Statements of Partners' Equity for the nine
                                    months ended September 30, 2000 and 1999 (unaudited)                                 6

                                    Statements of Cash Flows for the nine months
                                    ended September 30, 2000 and 1999 (unaudited)                                        7

                                    Notes to Financial Statements (unaudited)                                          8-9

                  Item 2.           Management's Discussion and Analysis of Financial

                                    Condition and Results of Operations                                              10-12

PART II.          OTHER INFORMATION

                  Item 1.           Legal Proceedings                                                                   13

                  Item 5.           Other Information                                                                   13

                  Item 6.           Exhibits and Reports on Form 8-K                                                    13

                                    Signatures                                                                          14
</TABLE>


                                       2
<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1.           FINANCIAL STATEMENTS

                        PW PREFERRED YIELD FUND II, L.P.

                                 BALANCE SHEETS
                    SEPTEMBER 30, 2000 AND DECEMBER 31, 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                          SEPTEMBER 30,       DECEMBER 31,
                                                                                              2000                1999
                                                                                       ----------------     --------------
<S>                                                                                    <C>                  <C>
                                                           ASSETS
Cash and cash equivalents                                                              $      1,643,046     $     1,926,081
Rents and other receivables, net of allowance for doubtful
   accounts of $33,000 and $47,000 at September 30, 2000
   and December 31, 1999, respectively                                                          676,062             503,000
Equipment at cost, net of accumulated depreciation of
   $12,730,764 and $12,736,703 at September 30, 2000 and
   December 31, 1999, respectively                                                            8,414,921           9,806,215
                                                                                       ----------------     ---------------
              Total Assets                                                             $     10,734,029     $    12,235,296
                                                                                       ================     ===============

                                              LIABILITIES AND PARTNERS' EQUITY
LIABILITIES:
   Accounts payable and accrued liabilities                                            $         48,100     $        54,100
   Payable to affiliates                                                                         96,425             103,043
   Deferred rental income                                                                        51,598              89,162
   Distributions payable to partners                                                            318,785             318,785
                                                                                       ----------------     ---------------
      Total Liabilities                                                                         514,908             565,090
                                                                                       ----------------     ---------------

PARTNERS' EQUITY:
   General Partners                                                                             495,583             568,137
   Limited Partners:
     Class A (54,027 Units outstanding)                                                       8,507,341           9,713,555
     Class B                                                                                  1,216,197           1,388,514
                                                                                       ----------------     ---------------
       Total Partners' Equity                                                                10,219,121          11,670,206
                                                                                       ----------------     ---------------
              Total Liabilities and Partners' Equity                                   $     10,734,029     $    12,235,296
                                                                                       ================     ===============
</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.


                                       3
<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.

                              STATEMENTS OF INCOME

             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                            2000                   1999
                                                                                     -----------------      ---------------
<S>                                                                                  <C>                    <C>
REVENUE:
    Lease revenue                                                                    $       1,017,171      $      1,174,822
    Gain on sale of equipment                                                                  182,892               287,952
    Interest income                                                                             22,639                15,436
                                                                                     -----------------      ----------------

         Total Revenue                                                                       1,222,702             1,478,210
                                                                                     -----------------      ----------------
EXPENSES:
    Depreciation                                                                               634,382               849,706
    Management fees (Note 2)                                                                    40,588                48,650
    General and administrative                                                                  56,370                82,905
                                                                                     -----------------      ----------------

         Total Expenses                                                                        731,340               981,261
                                                                                     -----------------      ----------------

NET INCOME                                                                           $         491,362      $        496,949
                                                                                     =================      ================
NET INCOME ALLOCATED:
   To the General Partners                                                           $          24,567      $         24,846
   To the Class A Limited Partners                                                             429,438               434,082
   To the Class B Limited Partner                                                               37,357                38,021
                                                                                     -----------------      ----------------

                                                                                     $         491,362      $        496,949
                                                                                     =================      ================
NET INCOME PER WEIGHTED AVERAGE
   NUMBER OF UNITS OF CLASS A LIMITED
   PARTNER INTEREST OUTSTANDING                                                      $            7.95      $           8.03
                                                                                     =================      ================
WEIGHTED AVERAGE NUMBER OF
   UNITS OF CLASS A LIMITED PARTNER
   INTEREST OUTSTANDING                                                                         54,027                54,027
                                                                                     =================      ================
</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.


                                       4
<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.

                              STATEMENTS OF INCOME

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                            2000                   1999
                                                                                     -----------------      ----------------
<S>                                                                                  <C>                    <C>
REVENUE:
    Lease revenue                                                                    $       3,120,033      $      3,640,208
    Gain on sale of equipment                                                                  212,892                12,479
    Interest income                                                                             60,888                91,727
                                                                                     -----------------      -----------------

         Total Revenue                                                                       3,393,813             3,744,414
                                                                                     -----------------      -----------------
EXPENSES:
    Depreciation                                                                             1,984,932             2,443,967
    Management fees (Note 2)                                                                   126,820               152,323
    General and administrative                                                                 127,868               132,117
                                                                                     -----------------      -----------------
         Total Expenses                                                                      2,239,620             2,728,407
                                                                                     -----------------      -----------------

NET INCOME                                                                           $       1,154,193      $      1,016,007
                                                                                     =================      =================
NET INCOME ALLOCATED:
   To the General Partners                                                           $          57,709      $         50,799
   To the Class A Limited Partners                                                           1,022,399               907,532
   To the Class B Limited Partner                                                               74,085                57,676
                                                                                     -----------------      -----------------

                                                                                     $       1,154,193      $      1,016,007
                                                                                     =================      =================
NET INCOME PER WEIGHTED AVERAGE
   NUMBER OF UNITS OF CLASS A LIMITED
   PARTNER INTEREST OUTSTANDING                                                      $           18.92      $          16.80
                                                                                     =================      =================

WEIGHTED AVERAGE NUMBER OF
   UNITS OF CLASS A LIMITED PARTNER
   INTEREST OUTSTANDING                                                                         54,027                54,027
                                                                                     =================      =================
</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.


                                       5
<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.

                         STATEMENTS OF PARTNERS' EQUITY

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                      CLASS A               CLASS B
                                                 GENERAL              LIMITED               LIMITED
                                                PARTNERS             PARTNERS               PARTNER                TOTAL
                                                ------------------------------------------------------------------------
<S>                                         <C>                  <C>                   <C>                  <C>
Balance, January 1, 2000                    $        568,137     $      9,713,555      $      1,388,514     $     11,670,206
Net income                                            57,709            1,022,399                74,085            1,154,193
Distributions declared to partners                  (130,263)          (2,228,613)             (246,402)          (2,605,278)
                                            ----------------     ----------------      ----------------     ----------------

Balance, September 30, 2000                 $        495,583     $      8,507,341      $      1,216,197     $     10,219,121
                                            ================     ================      ================     ================

Balance, January 1, 1999                    $        661,502     $     11,265,748      $      1,610,256     $     13,537,506
Net income                                            50,799              907,532                57,676            1,016,007
Distributions declared to partners                  (130,263)          (2,228,613)             (246,402)          (2,605,278)
                                            ----------------     ----------------      ----------------     ----------------

Balance, September 30, 1999                 $        582,038     $      9,944,667      $      1,421,530     $     11,948,235
                                            ================     ================      ================     ================
</TABLE>


                 The accompanying notes are an integral part of
                           these financial statements.


                                       6
<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.

                            STATEMENTS OF CASH FLOWS

              FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                               2000                1999
                                                                                        ----------------    ----------------
<S>                                                                                     <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income                                                                         $      1,154,193    $      1,016,007
     Adjustments to reconcile net income to net cash
       from operating activities:
         Depreciation                                                                          1,984,932           2,443,967
         Gain on sale of equipment                                                              (212,892)            (12,479)
     Change in assets and liabilities:
         Rents and other receivables                                                            (159,062)           (160,794)
         Allowance for doubtful accounts                                                         (14,000)                 --
         Accounts payable and accrued liabilities                                                 (6,000)             12,950
         Payable to affiliates                                                                    (6,618)             (2,669)
         Deferred rental income                                                                  (37,564)             60,093
                                                                                        ----------------    ----------------

             Net cash from operating activities                                                2,702,989           3,357,075
                                                                                        ----------------    ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of equipment                                                                        (742,967)         (3,783,732)
   Proceeds from equipment sales                                                                 362,221             949,780
                                                                                        ----------------    ----------------

            Net cash used in investing activities                                               (380,746)         (2,833,952)
                                                                                        ----------------    ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Distributions paid to partners                                                             (2,605,278)         (2,605,328)
                                                                                        ----------------    ----------------
            Net cash used in financing activities                                             (2,605,278)         (2,605,328)
                                                                                        ----------------    ----------------
NET DECREASE IN CASH AND CASH EQUIVALENTS                                                       (283,035)         (2,082,205)

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                               1,926,081           3,629,653
                                                                                        ----------------    ----------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                              $      1,643,046    $      1,547,448
                                                                                        ================    ================
</TABLE>

                 The accompanying notes are an integral part of
                           these financial statements.


                                       7
<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000
                                   (UNAUDITED)

1.   GENERAL

     The financial statements presented herein are prepared in conformity with
generally accepted accounting principles for interim financial information and
the instructions for preparing Form 10-Q under Rule 10-01 of Regulation S-X of
the Securities and Exchange Commission and are unaudited. As such, these
financial statements do not include all information and footnote disclosures
required under generally accepted accounting principles for complete financial
statements and, accordingly, the accompanying financial statements should be
read in conjunction with the footnotes presented in the 1999 Annual Report.
Except as disclosed herein, there has been no material change to the information
presented in the footnotes to the 1999 Annual Report.

     In the opinion of management, all adjustments (consisting of normal and
recurring adjustments) considered necessary for a fair presentation have been
included.

2.   TRANSACTIONS WITH AFFILIATES

                        ACQUISITION AND OPERATING STAGES

     ACQUISITION OF EQUIPMENT Pursuant to its investment objectives, the
Partnership has acquired, on an all-cash basis, certain leased equipment from
Equis Financial Group L.P. ("EFG") (formerly American Finance Group or AFG), an
affiliate of the Managing General Partner.

     The purchase price of the equipment acquired from EFG is equal to the
lesser of the adjusted cost of the equipment or the appraised value of the
equipment at the time of its acquisition by the Partnership ("EFG carrying
value"). The adjusted cost of the equipment is equal to the price paid by EFG,
plus the cost of an appraisal, EFG's cost of interim financing for the equipment
and any taxes paid by EFG, less certain interim rentals received by EFG with
respect to the equipment.

     ACQUISITION FEE The Managing General Partner, or its affiliates, receives
or is entitled to receive a fee equal to (i) 2.25% of the purchase price of
equipment purchased with net offering proceeds from the sale of Units, and (ii)
3% of the purchase price of equipment purchased with reinvested Partnership cash
flow as compensation for evaluating, selecting, negotiating and consummating the
acquisition of the equipment. Acquisition fees of $1,321 and $21,640 were earned
by the Managing General Partner during the quarter and nine months ended
September 30, 2000.


                                       8
<PAGE>

                        PW PREFERRED YIELD FUND II, L.P.

                          NOTES TO FINANCIAL STATEMENTS

                                   (CONTINUED)

     MANAGEMENT FEES The General Partners are entitled to receive a monthly fee
in an amount equal to 2% of gross rentals for Full Payout Leases, as defined in
the Partnership Agreement and 5% of gross rentals for other leases (payable
66.67% to the Managing General Partner and 33.33% to the Administrative General
Partner) as compensation for services rendered in connection with the management
of the equipment. Management fees of $40,588 and $126,820 were earned by the
General Partners during the quarter and nine months ended September 30, 2000.
Effective July 1, 1998, the Managing General Partner agreed to perform certain
administrative functions on behalf of the Partnership that previously had been
performed by the Administrative General Partner. For these services, the
Administrative General Partner pays the Managing General Partner an amount
equivalent to the fees otherwise due the Administrative General Partner.

     DISPOSITION FEES The General Partners, or their affiliates, were entitled
to receive a subordinated disposition fee in an amount equal to the lesser of
(i) 50% of the fee that would be charged by an unaffiliated party, or (ii) 3% of
the gross contract price relating to each sale of equipment (payable 50% to the
Managing General Partner or its affiliates and 50% to the Administrative General
Partner) as compensation for negotiating and consummating sales of equipment.
During the fourth quarter of 1998, the Partnership reversed previously accrued
subordinated disposition fees because the General Partners concluded that it was
no longer probable that these subordinated disposition fees would be paid. The
Partnership has not accrued for subordinated disposition fees during 1999 or
2000.


                                       9
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     The following discussion should be read in conjunction with the Financial
Statements of the Partnership and the Notes thereto. This report contains, in
addition to historical information, forward-looking statements that include
risks and other uncertainties. The Partnership's actual results may differ
materially from those anticipated in these forward-looking statements. Factors
that might cause such a difference include those discussed below, as well as
general economic and business conditions, competition and other factors
discussed elsewhere in this report. The Partnership undertakes no obligation to
release publicly any revisions to these forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
anticipated or unanticipated events.

LIQUIDITY AND CAPITAL RESOURCES

     The Partnership commenced its equipment reinvestment phase during 1993 by
investing excess cash flows available after the payment of the distributions to
the partners in additional equipment. As of September 30, 2000, equipment
purchased pursuant to the reinvestment program, including acquisition fees and
expenses, totaled $27,759,308.

     The Partnership invests working capital and cash flow from operations prior
to its distribution to the partners or its reinvestment in additional equipment
in short-term highly liquid investments. These investments are primarily
short-term commercial paper issued by large domestic corporations. At September
30, 2000, the Partnership had approximately $1.5 million invested in commercial
paper and a fund that invests in similar instruments.

     Cash and cash equivalents decreased $283,035 from $1,926,081 at December
31, 1999 to $1,643,046 at September 30, 2000. This decrease primarily represents
the amount by which cash used to pay distributions to partners and cash used to
purchase equipment exceeded cash generated by operating activities and equipment
sales.

     During the nine months ended September 30, 2000, the Partnership declared
distributions of cash flow received from operations in the amount of $2,605,278.
All distributions to the Class A Limited Partners represented an annualized
distribution rate of 11% of their contributed capital and all distributions to
the Class B Limited Partner represented an annualized distribution rate of 10%
of its contributed capital.

     Distributions may be characterized for tax, accounting and economic
purposes as a return of capital, a return on capital or both. The portion of
each cash distribution by a partnership, which exceeds its net income for the
fiscal period, may be deemed a return of capital. Based upon the amount of net
income reported by the Partnership for accounting purposes, approximately 54% of
the 11% cash distributions to the Class A Limited Partners for the nine months
ended September 30, 2000 constituted a return of capital. Additionally, since
inception, approximately 69% of the Class A Limited Partner's 11% cash
distributions constituted a return of capital. However, the total actual return
on capital over a leasing partnership's life can only be determined at the
termination of the Partnership after all residual cash flows (which include
proceeds from the re-leasing and sale of equipment after initial lease terms
expire) have been realized.


                                       10
<PAGE>

RESULTS OF OPERATIONS

     For the three and nine months ended September 30, 2000, the Partnership
recognized lease revenue of $1,017,171 and $3,120,033, respectively, compared to
$1,174,822 and $3,640,208 for the same periods in 1999. The overall decrease in
lease revenue from 1999 to 2000 was expected and resulted principally from
primary lease term expirations and the sale of equipment. The Partnership also
earns interest income from temporary investments of rental receipts and
equipment sales proceeds in short-term instruments.

     During the three months ended September 30, 2000, the Partnership sold
equipment having a net book value of $46,101 to existing lessees and third
parties. These sales resulted in a net gain, for financial statement purposes,
of $182,892 compared to a net gain in 1999 of $287,952 on equipment having a net
book value of $159,880.

     During the nine months ended September 30, 2000, the Partnership sold
equipment having a net book value of $149,329 to existing lessees and third
parties. These sales resulted in a net gain, for financial statement purposes,
of $212,892 compared to a net gain in 1999 of $12,479 on equipment having a net
book value of $937,301.

     It cannot be determined whether future sales of equipment will result in a
net gain or a net loss to the Partnership, as such transactions will be
dependent upon the condition and type of equipment being sold and its
marketability at the time of sale. In addition, the amount of gain or loss
reported for financial statement purposes is partly a function of the amount of
accumulated depreciation associated with the equipment being sold.

     The ultimate realization of residual value for any type of equipment is
dependent upon many factors, including EFG's ability to sell and re-lease
equipment. Changing market conditions, industry trends, technological advances,
and many other events can converge to enhance or detract from asset values at
any given time. EFG attempts to monitor these changes in order to identify
opportunities which may be advantageous to the Partnership and which will
maximize total cash returns for each asset.

     The total economic value realized upon final disposition of each asset is
comprised of all primary lease term revenues generated from that asset, together
with its residual value. The latter consists of cash proceeds realized upon the
asset's sale in addition to all other cash receipts obtained from renting the
asset on a re-lease, renewal or month-to-month basis. The Partnership classifies
such residual rental payments as lease revenue. Consequently, the amount of gain
or loss reported in the financial statements is not necessarily indicative of
the total residual value the Partnership achieved from leasing the equipment.

     Depreciation expense for the three and nine months ended September 30, 2000
was $634,382 and $1,984,932, respectively, compared to $849,706 and $2,443,967,
for the same periods in 1999. For financial reporting purposes, to the extent
that an asset is held on primary lease term, the Partnership depreciates the
difference between (i) the cost of the asset and (ii) the estimated residual
value of the asset on a straight-line basis over such term. For purposes of this
policy, estimated residual values represent estimates of equipment values at the
date of primary lease expiration. To the extent that an


                                       11
<PAGE>

asset is held beyond its primary lease term, the Partnership continues to
depreciate the remaining net book value of the asset on a straight-line basis
over the asset's remaining economic life.

      Management fees were approximately 4% and 4.1% of lease revenue during the
three and nine months ended September 30, 2000, respectively, compared to 4.1%
and 4.2% of lease revenue for the same periods in 1999. Management fees are
based on 5% of gross lease revenue generated by operating leases and 2% of gross
lease revenue generated by full payout leases.

     The General Partners, or their affiliates, were entitled to receive a
subordinated disposition fee in an amount equal to the lesser of (i) 50% of the
fee that would be charged by an unaffiliated party, or (ii) 3% of the gross
contract price relating to each sale of equipment (payable 50% to the Managing
General Partner or its affiliates and 50% to the Administrative General Partner)
as compensation for negotiating and consummating sales of equipment. During the
fourth quarter of 1998, the Partnership reversed previously accrued subordinated
disposition fees because the General Partners concluded that it was no longer
probable that these subordinated disposition fees would be paid. The Partnership
has not accrued for subordinated disposition fees during 1999 or 2000.

     General and administrative expenses consisted primarily of investor
reporting expenses, transfer agent, audit and tax fees.


                                       12
<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         None.


ITEM 5.  OTHER INFORMATION

         None.


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)      None.

         (b)      The Partnership did not file any Forms 8-K during the third
                  quarter of the fiscal year ending December 31, 2000.


                                       13
<PAGE>

                                    SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                PW Preferred Yield Fund II, L.P.
                                (Registrant)

                                By:      General Equipment Management II, Inc.
                                         A General Partner

Date: November 13, 2000                  By:    /s/ Carmine Fusco
                                         Carmine Fusco
                                         VICE PRESIDENT, SECRETARY,
                                         TREASURER AND CHIEF FINANCIAL
                                         AND ACCOUNTING OFFICER


                                       14